Sweden Europe EU 5G Ericsson Huawei

Swedish crossroads and 5G

I have a very special bond with Sweden and that is not just because my Grandmother was a strong and proud Swede. The kind and open-minded people, the vast coast, its countless rivers, and even more islands of Sweden remind me a lot of The Netherlands. There is something else we have in common. We call it Koffietijd and the Swedes call it Fika. It is not an activity, it is an emotion, a culture, somewhat of a ritual. The people are what Koffietijd and Fika is all about.

In an informal and pleasant setting, people talk about family, friends, news, work, whatever comes to mind. It is also not uncommon to address issues in a friendly way and solve them together. The Swedes and the Dutch are famous for finding solutions over a cup of coffee. The Swedes, just like the Dutch, are also know for making smart deals without making enemies.

Much to my surprise, and that of many of my peers, the Swedish Government abandoned this Swedish tradition for their 5G auction and licensing by bluntly banning Huawei (and other Chinese vendors) from their networks and ordering network providers in Sweden to remove Huawei equipment from their networks by 2025. The explanation that this is done for national security reasons appear to be very farfetched and politically motivated. It appears far more likely that the ongoing diplomatic spat between Sweden and China is the real reason behind this un-Swedish move.

Many Swedish business leaders opposed this decision and with due reason. The most focal opponent of the ban of Huawei was and is Borje Ekholm, the CEO of Ericsson, Sweden’s own 5G powerhouse. And that too is with due reason, even more so than any of the other business leaders who spoke up against this un-Swedish politicalizing of 5G and the innovation it brings.

Some might by surprised by Borje’s actions against this ban because it would theoretically provide Ericsson with an advantage on the Swedish market. Ericsson and its CEO think far beyond the Swedish market and understand the global impact of this ban. Huawei and Ericsson are undisputedly the leaders of the pack in 5G and other mobile technology. This means that they compete for almost every contract, but they do that in a healthy competitive way. In fact, both companies are well aware that this competition for the crown in 5G has pushed them to where they are today and will continue to push them in the future.

Besides this competition, both companies also collaborate in many areas. For example, in the development of global standards for new technology and the exchange of information between networks. Something which the global network operators highly appreciate! Huawei and Ericsson also have global patent licensing agreements which underlines the collaboration between the 5G leaders even further.

In short, Ericsson as globally operating technology provider has shown the Swedish way by finding good deals with Huawei without making enemies and still being able to compete on every level in the market. I was not present when these deals were made but it would not surprise me when informal conversations over a cup of good coffee and some pastries were involved in finding the common ground for striking these deals. That is the way things are done in Sweden (and The Netherlands).

Would that not be a much better way for the Swedish Government to deal with this? I am convinced it is and many Swedish business leaders agree with me. This blunt ban and politically motivated intervention in the global collaboration between the 5G leaders can have massive negative impact on that collaboration, and backfire on Sweden and Ericsson. What if China would respond in the same manner and ban Ericsson from its networks? What if this further escalates and derails the collaboration between two companies that take innovation beyond the borders of the countries they originate from? Why would China allow Huawei to collaborate with a Swedish company, when Sweden decides to harm Huawei and China without even the slightest attempt to find solutions?

This ban is not only un-Swedish, but also unwise from a long-term economical and international perspective. That Huawei does not benefit from this ban is crystal clear. Ericsson also does not benefit from this ban because it hinders it in its global competition and collaboration with Huawei.

The ones who are really duped by this ban are the Swedes themselves. The artificially created ‘monopoly’ on the Swedish market deprives them of the benefits of competition for 5G and future technology. No best deal for the money, no perpetual push to deliver the best available technology. And potentially even negative impact when traveling abroad because standards might no longer be developed between the technology leaders of the market.

We need to be able to see beyond today’s challenges and look at the long-term impact of collaboration and transparency in technology. Ericsson and Huawei do not only push each other to new heights, they also push others forward, and that is crucial for healthy competition from which we all benefit.

Collaboration between suppliers and operators foster standards that enable multiple suppliers to deliver seamless integration into networks and services, which will only happen when diversity of suppliers is ensured. That same diversity of suppliers increases competition in many fields, including pricing. Diversity of suppliers also increases cyber resilience and that is exactly what the EU toolbox on 5G Cybersecurity recommends! From that perspective, the exclusion of the largest vendor in 5G seems very counterproductive.

It is not too late to solve this in a constructive way, and we might need to involve our superpower: coffee and pastries! Dear Sweden, dear China, may I invite you for a FIKA so we can discuss this in a pleasant and informal setting? I am sure that we can find solutions in the best interest of everyone, especially the Swedes, just like for example Germany did after intensively inspecting Huawei’s equipment and evaluating the risks and benefits of collaboration.